What Should We Do With All This New Natural Gas Supply?

It wasn't all that long ago -- the 1970s -- when American natural gas production was waning. If you look at the graph above, production of natural gas hit a peak in the early '70s that it did not reach again until the late '90s or supersede by a great margin until just the past few years. Almost all of the recent production bump has come from unconventional sources -- shale gas, most prominently. And, if the projections of Energy Information Administration are to be believed (a subject of legitimate debate), the United States, China, and Canada are about to experience an explosion of natural-gas production.

The Atlantic's Alexis Madrigal in conversation with industry entrepreneurs shaping our future.
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On the political level, natural gas is a winner on the right and (most of) the left as a domestic fuel that also (with some disputes) generates less CO2 when burned. So, let's take this bounty at face value and say that we're going to be awash in natural over the next few decades at a time when oil production -- especially in the US -- is in a slowish, long-term decline.

Given that context, it'd make a lot of sense to see if you could make some things that are currently made with crude oil with natural gas. You'd have steady (or even declining?) feedstock costs while your crude competitors were getting killed.

That's the basic idea behind Siluria. Their basic technology can take natural gas and convert it into ethylene. Three interesting things about ethylene. First, it's the most widely produced organic compound; more than 110 million tons of the stuff were made in 2011. It ends up in stuff like plastic bags and antifreeze. Second, it's actually a very simple compound. Methane, i.e. natural gas, is one carbon atom bonded to four hydrogen atoms. Ethylene is two carbon atoms bonded to four hydrogen atoms. Third, once you've got ethylene, you can build the mix of hydrocarbons that we call oil.

"The investment proposition behind what we're going after is making natural gas into an economically advantaged and abundant competitive replacement to oil," Siluria's president Alex Tkachenko tells me in the video below.

But it's not easy to string together a bunch of natural gas molecules. And that's where their core technology -- a new kind of catalyst -- comes into play. It's based on the work of MIT's Angela Belcher, who uses different organisms (literally, living things) to build complex new materials. She has figured out how to play with the DNA of these organisms so that they produce different (and previously very difficult to manufacture) materials like the catalyst used in Siluria's technology. The best analogy I can think of is coral: biological creatures build a structure that can then be repurposed for other things. That's basically what's going on but at much, much smaller scales.

Returning to our original question, there have been several plans about what to do with the natural gas bounty. The most prominent idea is to stick methane into the transportation sector, which runs almost exclusively on oil. Natural gas cars already exist, though the fueling infrastructure remains sparse. Some people think you should put the U.S. truck fleet on natural gas and concentrate the fuel infrastructure spend on the nation's trucking corridors (i.e. highways).

Siluria's answer to the question, however, is more interesting than rebuilding the entire nation's transportation fuel system. They want to make use of that infrastructure by solving the scientific and technical challenges in turning methane the gas into ethylene.

In a post next week, I'll try to handicap their chances of success. The short version: Things certainly are going well, but there's a long way to go.